Construction struggles continue as new work dips to a five year low

21-Jun-2018

The value of new construction contracts in May
reached £4.5bn, a decrease of almost 10% compared to April and the
lowest amount for over five years. The two largest sectors in construction;
residential and infrastructure, both saw a decline as the industry continues
its slump this year so far.

The latest edition of the economic &
construction market review from industry analysts Barbour ABI highlights levels
of construction contract values awarded across Great Britain. The largest
project by value across the month was the £130m Wembley Stadium Station housing
development. The residential sector saw a dip in activity of 5.7% compared to
the previous month but still managed to claim the top spot as May’s largest
project by value.

Across the rest of construction, industrial and
education were the only sectors in May that produced positive growth in
contract values, increasing by 2.2 and 4.6% respectively compared to the
previous month. The biggest fall came from commercial and retail construction,
which despite having the largest project of the month, fell by almost 30% when compared to April figures.

Regionally, London was the region with the
largest share of contract awards value in April with 18.8% of the total, with
four of the largest ten projects across May. The capital was then followed by
the East of England with 14% and the North West with 13.5%.

Commenting on the figures, Michael Dall, lead
economist at Barbour ABI, said:

“Across May we continued to see the decline in
housing and infrastructure construction, with the value of new work in
construction reaching its lowest point since January 2013. Whilst it’s
encouraging that the industrial and education sectors saw contract values
increase, the deficit was too large to make up the shortfall, with both housing
and infrastructure continuing in their slump.”